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401(k) Challenges

How to Roll Over Your 401(k) to Betterment

Betterment makes rolling over your 401(k) simple and efficient. Get started online, or with a rollover concierge.

Brian Pollack

By Brian Pollack
Rollover Specialist, Betterment
Published: December 16, 2016 | Updated: May 22, 2018

Roll over your 401(k) online, or speak to a rollover concierge. We’ll call your current plan provider together to begin the process.

Remember that a traditional, tax-deferred 401(k) should be rolled over to a traditional IRA (or else you will have to pay taxes on it).

No matter how you roll over, at Betterment you’ll benefit from personalized investment advice, automated investing, tax-smart tools, and transparent, low fees.

Rolling over a 401(k) shouldn’t be a big headache, but for many people it is—and sheer dread (or lack of information) can lead you to avoid rollovers altogether.

In fact, when you want to complete a 401(k) rollover, your former employer may put up roadblocks, according to a 2013 Government Accounting Office (GAO) report.

The GAO also found that your former employer won’t explain all the possible alternatives, might mislead you about account charges, or encourage you to roll your 401(k) over to an Individual Retirement Account (IRA) within the same institution, even if it’s not the best option for you.

We offer a better solution. By rolling over your 401(k) to Betterment, you’ll experience a fast and easy rollover process. Afterward, you’ll benefit from an automated investment engine that keeps you on track to meet your goals, offers transparent, low-cost investment advice, and uses tax-efficient tools to maximize your money’s growth and returns.

You’ll also benefit from an investment manager who is a qualified fiduciary. This means that you’ll receive transparent advice that is in your best interest, and not swayed by outside fund providers who offer commissions for investment product recommendations.

How to Roll Over Your 401(k) to Betterment

Betterment does not charge a fee for rolling over your old 401(k).

The first step is to create a Betterment account, and then you can start your rollover onlineGet started by clicking “Start Rollover” at the top right-hand side of your Summary tab. We’ll send you a personalized email with all the steps, including how to transfer your 401(k) funds to Betterment.

StartYourRollover

You’ll want to contact your 401(k) provider and let them know that you’re rolling over your funds to Betterment.

Your provider will then release your 401(k) funds by issuing a check—either directly to us, or sent to you, which you can then forward to us at the address here and also provided in your email. The same fund transfer process applies for any other employer-sponsored plan.

Apples to Apples

Remember that a traditional, tax-deferred 401(k) should be rolled over to a traditional IRA (otherwise your rollover funds may be subject to taxes). Though rarer, funds from a Roth 401(k), can be rolled over to a Roth IRA.

If you’re not sure what type of retirement account you have, and which rollover account to set up, our guide makes it really easy and will help you find out your account type.

Knowing your account type is important. For example, if you try to roll over a 401(k) to a Roth IRA, it’s considered a Roth conversion and you’ll likely owe taxes on that transfer of funds.

(If you’re wondering about how to roll over an existing IRA to Betterment, you can do that with us as well.)

Ask About Fees

While it’s free to initiate a Betterment IRA rollover, your 401(k) provider may charge you for closing your account. As you’re starting a partial rollover of your 401(k) funds, ask your current plan provider whether you will incur any fees.

Once your Betterment rollover account is setup, you’ll begin to benefit from some of the lowest investing fees in the industry.

Whatever you do, don’t procrastinate or let your investments sit idly by with your company’s 401(k) provider. Roll your 401(k) over to Betterment now.

When deciding whether to roll over a retirement account, you should carefully consider your personal situation and preferences. The information on this page is being provided for general informational purposes and is not intended to be an individualized recommendation that you take any particular action.

Factors that you should consider in evaluating a potential rollover include: available investment options, fees and expenses, services, withdrawal penalties, protections from creditors and legal judgments, required minimum distributions, and treatment of employer stock. Before deciding to roll over, you should research the details of your current retirement account and consult tax and other advisors with any questions about your personal situation.

 

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